The student debt crisis is often seen as a problem impacting millennials, but this misconception underestimates the far reaching impact it has on all employees. Although higher percentages of millennials have student debt (42%), many Gen X (26%) and baby boomers (11%) are still not student debt free. Also, outstanding student loans are affecting baby boomers helping their kids to pay down balances instead of saving enough money to fund their own retirement.
According to the 2016 Employee Financial Wellness Survey, the top two financial concerns for employees are not having enough emergency savings for unexpected expenses (55%) and not being able to retire when they want to (37%), both of which are being exacerbated by growing financial debt. This report analyzes, among other financial wellness topics, the impact student debt is having on the U.S. workforce. Specifically, the report found that 79% of millennials reported that their student loans have a moderate or significant impact on their other financial goals. A higher percentage of baby boomers (80%) claimed the same thing so despite being seen as a generational problem, student debt is impacting more people than employers think.Student and other financial debt should be a top concern for employers. The report found that more than one in four of all employees (37% of millennials) report that personal finance issues have been a distraction at work (up from 20% last year) and 46% of those who are distracted by their finances at work say that they spend three hours or more a week thinking about or dealing with personal finance issues on the job. The amount of financial-related stress on employees is impacting their well-being and their productivity at work.
Budgeting concerns should not be a reason for employers to sit idly waiting as the problem gets worse. For those employers with a 401 (k) plan, the plan administrator should have free financial wellness resources for their clients to use. There are also a number of advocacy groups and wellness vendors, including Wellable, that offer free financial wellness seminar/webinar.